Reference no: EM13493337

Individual Tax Task - Financial Information

Personal Data:

Spouse A is one of the partners in Fan Company A. Spouse A is married and has a total of three children living in the household. Spouse A and Spouse B have one 10-year-old child together. They each have one child from a previous marriage. Spouse B's child is an 18-year-old college freshman living at home, and Spouse A's child is a high school junior. Spouse B's mother lives with the family. She receives a monthly $750 Social Security check. She contributes all but $90 of this check to the family each month.The spouses have calculated the rent, food and other family contribution to her support at $7000 per year.

Earnings:

Spouse A has a K-1 from the partnership. It shows Spouse A's partnership share of income is $142,000. Spouse A's cash withdrawals during the year were $83,500. Spouse A has a W-2 showing $2,000 in gross earnings from the city park district for a part-time soccer referee job. Spouse B has 20 years experience as a corporate officer and was hired and began work the first of February as a controller for an electronics firm. Spouse B's gross earnings are $8,000 per month.

Investments:

·Spouse A invested in 1,000 shares of Company E stock before the couple married 11 years ago. Company E pays a quarterly dividend.

·Spouse B was not employed during January and tried day trading for the month. Spouse B bought and sold on a daily basis and experienced net losses of $5,000.

·The couple owns a $5,000 municipal bond that pays 9% interest in semi-annual payments.

Other factors:

·Spouse A pays $600 in alimony monthly. This continues until his former spouse remarries or is deceased.

·Spouse B receives monthly child support of $200 for her child from her previous marriage until the child is 18.

·Spouse A has health insurance through the partnership. Spouse B covers herself and the children through her employer's plan.

·Spouse A has a Keogh retirement plan into which he contributes 10% of his earnings, up to the maximum allowed.

·When Spouse B was hired for her current position, the couple decided to move closer to Spouse B's new job to reduce commute time.

When Spouse B had her former job, she commuted three miles to her workplace. Spouse B's new position, however, is located 52 miles from their former home.

Due to Spouse B's new job the couple sold their house for $430,000. (They purchased it 10 years ago for $100,000, and four years.